The Weekly Update
Week of January 20th, 2025
By Christopher T. Much, CFP®, AIF®
Stocks roared back last week, fueled by upbeat Q4 corporate reports and economic news that stalled inflationary fears.
The Standard & Poor’s 500 Index rose 2.91 percent, while the Nasdaq Composite Index advanced 2.45 percent. The Dow Jones Industrial Average led, picking up 3.69 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 2.00 percent.
Goldilocks is Back
The “Goldilocks” narrative—an economy that’s neither too hot nor too cold—made a comeback last week.
Tuesday’s Producer Price Index report showed that wholesale prices rose less than expected in December—one piece of evidence suggesting a cooling economy.
Stocks jumped out of the gate Wednesday after the December Consumer Price Index (CPI) report showed core inflation (minus volatile energy and food prices) rose less than expected. Investors also cheered Q4 reports from a handful of money center banks and positive news out of the Middle East.
Stocks took a breather Thursday before pushing higher again on Friday.
The S&P and Dow Industrials had their best week since early November, and the Nasdaq saw its best weekly performance since early December. The yield on the 10-year Treasury note fell roughly 20 basis points over the week.
Slowing Inflation
Investors welcomed the inflation reports, believing wholesale and consumer prices might trend lower in 2025.
First, producer prices came in at 0.2 percent, which was less than the 0.4 percent increase anticipated. Then consumer prices came in at 2.9 percent, slightly elevated, but the real story was core inflation. When you subtract food and gas prices, CPI saw its smallest monthly increase since July.
This Week: Key Economic Data
Monday: Markets closed – MLK Jr holiday
Wednesday: Treasury Buyback Announcement. 20-Year Treasury Bond Auction.
Thursday: EIA Petroleum Status Report. Weekly Jobless Claims. Fed Balance Sheet.
Friday: Existing Home Sales. Consumer Sentiment.
Source: Investor’s Business Daily – Econoday economic calendar; January 17, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Netflix, Inc. (NFLX), The Charles Schwab Corporation (SCHW), Prologis, Inc. (PLD), Interactive Brokers Group, Inc. (IBKR), 3M Company (MMM), Capital One Financial Corporation (COF)
Wednesday: The Proctor & Gamble Company (PG), Johnson & Johnson (JNJ), Abbott Laboratories (ABT), The Progressive Corporation (PGR), GE Vernova Inc. (GEV)
Thursday: Intuitive Surgical, Inc. (ISRG), GE Aerospace (GE), Texas Instruments Incorporated (TXN), Union Pacific Corporation (UNP), Elevance Health, Inc. (ELV)
Friday: American Express Company (AXP), Verizon Communications Inc. (VZ), NextEra Energy, Inc. (NEE), HCA Healthcare, Inc. (HCA)
Source: Zacks, January 17, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
